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back   04/2013 Are you still working on the Close?
Have you ever been in the situation that a financial close has not been available on time, that you needed added resources for the period end, or that information required for decision is available at certain points in time only?

So did you ever ask yourself whether the topic “Close” can be organized in a more efficient manner?

Enterprises that are looking into these matters often take the route of a “Fast Close”. But there are much more opportunities: Make the close obsolete! While fast close is mainly addressing the speed of the period end routines, our program enables you to do away with such routines at all. Besides the non material benefits of a fast close, this way a company can gain benefits that are directly measurable as well.

Fast Close
Implementing a Fast Close brings a number of benefits:

  • You have quicker access to financial information.
  • You have more time for analytics.
  • Processes improve.
  • The control environment is improving as well.
  • You have more time, period.

Indirectly, these items will bring financial benefits as well. But if you take the next logical step in improving your processes, the benefits are directly measurable:

  • Lower costs
  • More flexibility
  • Less effort on audits
  • Improved quality of information

Added Efforts at Peak Times
Overtime is costly. Evenly spreading the workload – based on the transactional approach – will avoid added work that is related to a closing process.
Of course, there may be peaks even after implementing the transaction principle; however, these will be driven by volume changes from your core business activities. Even in such cases, standardization will aid in the reduction of current premium costs.
Standardization means flexibility: Standardized processes allow easy transfer within an organization, be it for temporary support as load balancing, or be it permanent with the target to centralize or decentralize activities. Standards also ease maintenance and development.
Within a standardized process environment we apply principles of lean manufacturing principles: We design processing that avoids loops, we question complexity, and we link organization and processes.

ERP system based integration carries two benefits: Any transaction needs to be touched once only, and transfer of information should not require any rework.
Applying the enrichment method ensures that any information generated by a transaction will carry all the information that will be required in downstream processing or analytics.
The Transactional Approach
Recording business events at occurrence, and at the same time generating the information that is supporting reporting and closing processing, will totally change the nature of the close:

  • Period end is no event. It is just a point in time.

Eventually, transactional recording in a standardized and integrated environment will allow you to base period end – and interim management information – directly on the information that is already held on your ERP system.
Die Methods
To be able to directly utilize existing information for executing a period end, we implement

  • Tools to ensure the completeness and correctness of transactional information, and
  • Concepts to capture knowledge based (non transactional) information.

We support you in identification of those objects that need to be the base of regular monitoring. Whether it is for a close or for any other analytics, information does not have to be prepared separately – closing the books and management information are just taking a snapshot of information that is already available.

Contact: info@the-finance-coach.com

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